KUALA LUMPUR (Jan 11): Sarawak Consolidated Industries Bhd (SCIB) plans to raise as much as RM10.98 million via a private placement, mainly for repayment of bank borrowings and fund its working capital requirements.
The proposed exercise will entail the placement of not more than 10% of its issued shares at a price to be determined later, the precast concrete product maker said in a bourse filing.
The group has a total share base of 582.04 million shares, while it had 245.18 million outstanding warrants as at Dec 30, 2022 (the latest practicable date).
Assuming that all its 245.18 million warrants are exercised, SCIB said the planned private placement will entail the issuance of up to 82.72 million placement shares (under the maximum scenario).
SCIB said that based on an illustrative issue price of 13.27 sen a share — a discount of 9.97% to the five-day volume-weighted-average-market-price of its shares up to Dec 30, 2022 of 14.74 sen — it expects to raise up to RM10.98 million from the fund-raising exercise.
Of the proceeds, SCIB said it has earmarked RM7.08 million for the repayment of bank borrowings, and another RM3.5 million ring-fenced for working capital, which it plans for paying staff salaries.
The remaining RM400,000 will be used to defray costs related to the cash call exercise.
The private placement is subject to Bursa Securities approval, and the group aims to complete the cash call exercise within six months from the date of approval from Bursa Securities.
In a separate statement, SCIB group managing director Rosland Othman said the proposed private placement is a more expeditious way to raise funds than a rights issue and is also more cost-effective than bank borrowings given the higher interest rates.
“By repaying current bank borrowings, we can reduce gearing and increase the net assets while strengthening the financial and capital position of the company as well as potentially improving the liquidity of our shares in the market,” he added.
Shares in SCIB ended 0.5 sen or 3.45% higher at 15 sen on Wednesday (Jan 11), giving the group a market capitalisation of RM87 million.